Whether you are starting your own company or you want to expand your business, South Africa, thanks to its diversity and economic opportunities, is a great place to do business. But how do you start a business in South Africa, especially as a foreigner? It can be a long and somewhat complicated task, especially if you aren't used to bureaucratic red tape and jumping through hoops.
Here is a helpful guide on how to start a business in South Africa.
Understanding Your Two Main Options
If you are a foreigner, there are two different options available for you to start your company in South Africa: a business visa and a financially independent visa.
A Traditional Business Visa
A business visa is what most foreigners who are setting up a business in South Africa apply for. To apply for this visa you need to have ZAR 5 million in the bank, a business plan ready, and a guarantee that 60% of your employees will either be South African or permanent residency holders. You also need to guarantee a certain amount of job created within the first three years.
To help with this, companies like paystubcreator.net can help with payroll and making sure you take out the necessary taxes.
A few things to note. The ZAR 5 million must come from outside the country with the purpose of being introduced to the South African economy. So, in order to qualify for this type of visa, your primary source of start-up capital must come from foreign investors.
Also, this type of visa only allows you to start one company per permit. So, if you are planning to open more than one company, this type of visa may not be for you.
A Financially Independent Visa
When you apply for a financially independent visa, many of the requirements you need to fulfill in terms of who you hire, how many different companies you can start, a business plan, or the ongoing need to prove your business continues to be viable.
However, there are other criteria you need to meet in order to secure this visa. For example, while there is no minimum requirement for start-up capital, you do have to prove you have a net worth of ZAR 12 million and be willing to pay an extra ZAR 120k in application fees. There is also a nine-month waiting period too as opposed to the typical six months needed to process the business visa.
Knowing How to Start a Business in South Africa
Once you know how to start a business in South Africa you can fill out the paperwork and start the process to get your business up and running. With all the innovative possibilities coming out of South Africa, now is the perfect time to think about expanding or starting your own company. Plus, starting in SA is a great way to expand into the rest of Africa.
For more insight on how to create a thriving business and the economic landscape in Africa, check out our blog.